Question :
11) Cost items that do not change between the alternative : 1185983
11) Cost items that do not change between the alternative choices involved in the decision are not relevant to the decision to be made as they will be incurred no matter which alternative is chosen.
12) An expected value is the weighted average of the outcomes, with the probability of each outcome serving as the weight.
13) The last step in the decision process is normally to
A) evaluate and explain outcomes.
B) make assumptions and predictions.
C) choose alternatives.
D) perform quantitative analysis.
E) gather information.
14) The feedback obtained in the decision process cannot affect
A) future predictions.
B) the prediction method.
C) the decision model.
D) implementation.
E) past performance.
15) The Gameshop manufactures specialized board games. Management is attempting to search for ways to reduce costs and is considering two alternatives for an upcoming project of special games that must be delivered to the customer in 12 months’ time. Management agreed to the special project job as they have an idle plant that is scheduled for demolition 18 months from now, and either alternative will easily meet the delivery deadline.
Alternative 1 requires 10 machine operators and 2.5 individuals to handle direct materials. Employee pay averages $17.50 per hour and will increase to $18.50 at the mid-point (July 1) of next year. Each employee currently works 2,500 hours but will decrease to 2,400 hours if Alternative 2 is implemented. The second proposal only requires 8.5 workers.
Which of the following items of information are relevant to this decision?
A) property taxes for the idle plant
B) hourly wage rates
C) the timing of the wage increase
D) the number of employees required in each alternative
E) the delivery deadline
16) Which of the following is false concerning relevant costs and relevant revenues?
A) Every decision deals with the future.
B) Nothing can be done to alter past costs or revenues.
C) Historical costs may be useful for predicting future costs.
D) Historical costs in themselves are irrelevant to a decision on future costs.
E) Total differential costs include both relevant and irrelevant costs.
17) Which of the following anticipated future costs always differ among alternative courses of actions?
A) direct labour costs
B) historical costs
C) relevant costs
D) direct materials costs
E) indirect costs
18) The variation in total costs between two alternatives is known as
A) differential cost.
B) analyzed cost.
C) irrelevant cost.
D) predictable cost.
E) expected cost.
19) Employee morale at Bedland Inc. is very high. This type of information is known as
A) a qualitative factor.
B) a quantitative factor.
C) a nonmeasurable factor.
D) a financial factor.
E) a numerical factor.
20) Ted owns a small body shop. His major costs include labour, parts, and rent. In the decision making process, these costs are always considered to be
A) fixed.
B) qualitative factors.
C) quantitative factors.
D) variable.
E) relevant costs.
